I have a ton of money in a checking account earning 0% interest. I thought about buying 3-month CDs with 2.25% interest (or 0.56% per 3 months), something short term so my money isn't locked up for long in case I need it.
However, I found high-yield corporate bonds for sale at by broker. I am very new to bonds, so I don't really know how it will work for me.
I screened for bonds that have maturity dates at around 3 months. Here is an example of one I found, a 10-year bond that just happens to be maturing in about 3 months:
Coupon: 7.175 Fixed
Issue Date: 06-18-2009
Maturity Date: 06-18-2019
Details: TELECOM ITALIA CAP S.A. Non Callable, Make Whole Calls, TELECOM ITALIA S.P.A. CUSIP: 872456AA6
Credit Rating: Ba1/BB+
My broker says that if I were to buy 50 of them today (3-4-2019), the costs would be this:
Min. Qty: 50
Accrued Interest: $787.26
Total Cost: $51,487.26
If I buy these bonds and wait until the maturity date, which is 3 months later, how much would I earn dollarwise? Is it actually the YTM: 2.122% for just 3 months, or is 2.122% an annual rate where 0.53% would be my actual 3-month earnings?